May 26, 2010

Being Blackmailed into Tax Fraud

In this African country I am in, tax officials do everything within their power to push honest taxpayers into fraud. They do this so that the taxpayer becomes out of compliance and can then be blackmailed into bribes.
A couple weeks ago, our company signed a new corporate lease for the building we are in. We extended the lease term to 10 years and we expanded the amount of space we were in. Our contract calls for our rent to be paid monthly in advance.

The law requires that all contracts be registered with tax officials within a 30 day period from signature. The registration fee is equal to 5% of the yearly lease amount and it must be paid every year and in advance.
So when we went to the tax office to register our new lease yesterday, we went prepared to pay the 5% of the yearly lease amount. Let’s say our rent is $1,000 per month, which comes to $12,000 per year. That would be a $600 registration fee.

After looking at the content of the lease, the tax officials told us that since it was a commercial lease, the tax is 10% annually and not 5%. So this morning, we returned to the tax office with the 10% fee which, based on our example, is $1,200.

Well, as if that is not enough of a hindrance for taxpayers, the tax officials informed us today that since the lease is for 10 years, we must pay in advance, the tax for the 10 years. In our same example, this would mean $12,000 in taxes to comply to register a lease for which monthly rent is $1,000!

We don’t think this is true. But the tax officials are refusing to register the lease. They will probably continue to refuse until the 30 day period is passed. After the 30 days, there is a 100% penalty. This means that whether we have to pay the registration tax for 1 year or 10 years, the fee will be doubled. So we will have to pay, under the example, $2,400 or $24,000 to make legal a lease for which rent is $1,000 a month.

Of course, the tax officials will then propose an easier, less expensive way, through bribery. We have decided not to give in to the blackmail. We will pay an amount equivalent to 10% in tax and get our receipt, even if they don’t register the lease itself.

It is exhausting to try to fight corruption day in and day out. It would be so much easier to go with the flow. We are continuously “punished” for trying to do the right thing. I wonder how much longer we will be able to resist…

7 comments:

  1. thanks for your stories. I am an entreprenuer looking to go home. Love your stories.

    ReplyDelete
  2. Are you in need of a loan? Do you want to pay off your bills? Do you want to be financially stable? All you have to do is to contact us for more information on how to get started and get the loan you desire. This offer is open to all that will be able to repay back in due time. Note-that repayment time frame is negotiable and at interest rate of 3% just email us (creditloan11@gmail.com)

    ReplyDelete
  3. I appreciate about your work you are sharing really nice informative content for us. Thank you so much.
    business coaching program for women entrepreneurs

    ReplyDelete
  4. “I could not have closed on my first home without Mr, Benjamin Lee ! Benjamin and his team went above and beyond for me on this transaction. He handled my very tight turn around time with ease and was always available for me when I had questions (and I had plenty), even when he was away from the office, which I greatly appreciated! He and his team handled many last-minute scrambles with the seller and worked tirelessly to make sure that I could close before my lease (and my down payment assistance, for that matter) expired. Mr Benjamin is incredibly knowledgeable Loan Officer, courteous, and patient. I went through a couple offers on properties before my final purchase and Benjamin was there to help with each one, often coordinating with my agent behind the scenes. I felt supported throughout the entire process. Thanks to Benjamin and the tireless efforts of his team, I am now a proud home owner! I would encourage you to consider Benjamin Briel Lee for any kind of loan.Mr, Benjamin Lee Contact informaions.via WhatsApp +1-989-394-3740  Email- Lfdsloans@outlook.com.

    ReplyDelete
  5. I loved this assignment article and kept updating interesting articles. I will be a regular reader. I am offering help to students over the globe at a low price.. 일본야동

    Please visit once. I leave my blog address below
    한국야동
    일본야동

    ReplyDelete
  6. This is a fascinating subject and I hope to learn more about it in the future.
    토토

    ReplyDelete

Related Posts Plugin for WordPress, Blogger...